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We are almost at a point where we can all take a month or so off after which we would return to be met by economic reports eerily similar to those we left behind earlier. Nothing substantial is going on. Nothing. We are stuck in a malaise. Neither sinking nor rising with any consistency or velocity. We are lingering. Or perhaps, given the political idiocy current in Washington, a better word is malingering.

The intensity with which the country’s leading deficit hawks continue to ignore financial speculation taxes (FST) is getting ever more entertaining. While deficit hawks like Wall Street investment banker Peter Peterson, Morgan Stanley director Erskine Bowles, and the Washington Post never tire of preaching the virtues of shared sacrifice, somehow sacrifice for Wall Street never features as a part of this story. Read more…

According to Kash Mansoori deficits on the current account were more important sources of the present crisis in Greece and Spain than government deficits. According to Aaron Tornell and Frank Westermann Greece is not making any progress with improving the indeed ‘whopping’ deficit on its current account. Mansoori is right. And Tornell and Westermann are wrong (as they base themselves on 2009 and 2010). In the first six months of 2011 the trade balance (part of the current account) of Greece has improved dramatically (see graph). This improvement was by far the largest of the entire EU, even in absolute terms. As Greece already had a surplus on the services balance (tourism…) which probably also improved in 2011 this means that the deficit has diminished in a spectacular fashion. Read more…

a shift in how big drug firms do business. For years they have relied on blockbusters that treat many people. Now they are investing in more personalised medicine: biotech drugs that treat small groups of patients more effectively.

It explained how

new cancer drugs offer small benefits at an exorbitant price. Provenge costs $93,000 for a course of treatment and extends life by an average of four months. Yervoy costs $120,000 for three-and-a-half months.

Obviously only the ultra-rich will genrally be able to afford them.

This week members of the US medical profession have reacted. Read more…

Three months ago I wrote about the risks that the European authorities were posing to the U.S. economy and asked what the U.S. government was going to do about it. It was clear at that time that “the Troika” – the European Commission, European Central Bank (ECB), and the International Monetary Fund (IMF) – was once again playing a dangerous game of brinksmanship, at that time with the government of Greece. They were trying to force the Greek parliament to adopt measures that would further shrink the Greek economy and therefore make both their economic situation and their debt problem worse, while inflicting more pain on the Greek electorate. The threat from the Troika was putting the whole European financial system at risk, since it raised the prospect of a chaotic, unilateral Greek default. Read more…

The middle classes, including nearly all economists, continue to prefer not to talk about plutonomy nor even admit its existence. But among themselves the hyper rich are not so inhibited and so occasionally, as with the notorious Citigroup plutonomy reports, their analyses leak to us 99 percent.

Two such leaks are reported in a short article by Timothy Noah in the October 6th issue of The New Republic. Read more…

Lane Kenworthy has posted two extremely helpful graphs that try to gauge the efficiency of the US health-care system relative to those of other wealthy countries. The first shows life expectancy in each country, in 2007, against per-capita health expenditures in the same year. Read more…

Despite vast financial wealth, natural and human resources, the Arab World remains underdeveloped and more than half the population is condemned to a life of poverty. Instead of underdevelopment, a more fitting concept that would capture the recent historical phase would be that of reverse development or de-development. De-development represents a combination of retrogression in the build-up of physical capital and a denial of the right of people to struggle to build a better life by repression and absolute authoritarianism. Although capital accumulation entails a blend of expansion of market driven forces (commodity realisation) and development by encroachment and dispossession (control by violent means including imperial plunder of third world resources), in the Arab world, the latter pattern of accumulation held primacy, hence, determining the pace of development altogether. Read more…

That is a question that people should be asking as the other potential candidates withdraw from the race. At the moment, the economies of the United States, Europe, and Japan are all suffering from weak growth or worse. The debt crisis of eurozone countries threatens another financial crisis that could lead to another plunge in output, not just in Europe but throughout the world. Read more…

The Institute for New Economic Thinking has announced that it has given Steve Keen, winner of the Revere Award, a grant of $125,000 to turn his money-based model of the macro-economy – which draws on the theories of Hyman Minsky and John Maynard Keynes – into a computer program for students and economists. Read more…

Is it possible to construct a plausible economic story which tells us that a fast increase in debts led to or enabled, in this century, economic bubbles as well as higher inequality, deficits on the current account and an erosion of the tax base, a situation which, when the bubbles deflated, led to large government deficits? Vicente navarro tries to do this. And he might have a point (graph 1). Read more…

Back in the summer of 2009, Nathan Lane and I wrote a CEPR report (pdf) documenting something that is surprising to many Americans. The United States has just about the smallest small-business sector in the world’s rich economies.

Our report used OECD data to look at the share of workers in small businesses in each of a variety of industries (manufacturing, computer-related services, research and development, “restaurants, bars, and canteens”, real-estate activities, “renting of machinery and equipment”). These were all of the industry categories for which the OECD had produced comparable data on the employment share by enterprise size. Unfortunately, at that time, the OECD had no numbers for the distribution of employment by enterprise size for the economy as a whole.

But, the OECD’s Entrepreneurship at a Glance 2011 now reports internationally comparable data on total small-business employment for a collection of rich and selected middle-income countries. The first figure below shows Read more…

Two types of visualisations are paired together on this graphic. The choropleth maps illustrate the number of publishers in each country with darker colours indicating more publishers. The treemaps indicate the number of journals published by each publisher. This graphic is segmented into three categories: publishers of science journals, publishers of social science journals and publishers of both. Read more…

Look for Bernanke to be burned in effigy at the next meeting of the Republican Party leadership. In defiance of the brazen attempt to interfere with Fed independence by that leadership – if that word is appropriate – the Fed announced that it was going to engage in yet another new trick in order to support the economy. Citing continued, and possibly worsening, economic weakness the Fed unveiled a new trick. Read more…

I’ve been naïf. Based on this information, I stated that total debt (government, households, companies, banks) in Greece was comparatively low. But it isn’t. Total formal debt is low, indeed. But informal debt is increasing fast. And it’s increasing because Greece finds itself in the very opposite of a liquidity trap: an illiquidity trap. This is a vertical supply function of money. Even very high interest rates do not entice lenders to lend to Greece, or to Greek households or companies. Cash is scarce, credit and even debit cards don’t work anymore and people will therefore tend to hoard cash – just like they did in the seventeenth, eighteenth and nineteenth century (well, ‘they’, I mean the non-poor). And the Greek economy is responding to this eighteenth century illiquidity situation in an eighteenth century way. Read more…

Ever since Texas Governor Rick Perry attacked Social Security as a Ponzi scheme as an opening gambit in his presidential campaign we have been treated to a spirited debate in the media on the truth of this proposition. Those of us who consider this to be ill-informed nonsense that has the effect of misleading the public about the state of Social Security’s finances were told to lighten up. After all, what is wrong with debating the topic? Read more…

The distribution of top incomes (using tax data) for a wide variety of countries has been made available on the World Top Incomes Database thanks to the efforts of Facundo Alvaredo, Anthony B. Atkinson, Thomas Piketty, and Emmanuel Saez. Read more…

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